Canada's economy showed positive momentum in March, with GDP increasing by 0.1% month-on-month, aligning with expectations. However, the domestic front faced challenges, including lower household spending and weaker final domestic demand. The goods-producing industries led the growth, driven by a rebound in mining, quarrying, and oil and gas extraction and construction sectors. On the services side, retail trade, transportation and warehousing, and accommodation and food services also contributed to the growth.
The Bank of Canada's rate decision is the key focus this week, with market bets for a rate cut having dwindled after stronger-than-expected GDP growth. The probability of a June 4 rate cut has dropped to around 16%.
Toronto's real estate market is experiencing fierce competition among landlords, with incentives like rent-free months and gift cards to attract tenants. This has led to a decrease in national average asking rent for the seventh consecutive month.
President Trump's new steel tariffs of 50% on steel and aluminum imports to Canada are expected to cause "mass disruption" and negative consequences for the industry, which is highly integrated with the U.S. steel industry. The Canadian government is discussing measures to strengthen the domestic economy and reduce reliance on the U.S. market.
